Agricultural/Financial correspondent
Christopher's Feed
Feb 12, 2011

Obama, Congress set to fight on funds for regulator

WASHINGTON (Reuters) – President Barack Obama’s proposed budget for fiscal 2012 includes $308 million for the Commodity Futures Trading Commission, up 82 percent from the regulator’s current spending level, two sources with direct knowledge of the number said on Friday.

But House Republicans looking to slash government spending want steep cuts at the CFTC, in a bid to starve it because of its lead role in implementing Dodd-Frank financial reforms. The CFTC is one of the focal points of anticipated bitter partisan fights over funding.

Feb 11, 2011

USDA deregulates corn amylase used for ethanol

WASHINGTON (Reuters) – The U.S. Agriculture Department said on Friday it has deregulated a variety of corn genetically engineered to produce a common enzyme that speeds the breakdown of starch into sugar, a vital step in making ethanol.

USDA’s Animal and Plant Health Inspection Service said Syngenta, the Swiss maker of the enzyme, called alpha-amylase, will create an advisory council and take other steps to alleviate concerns by foodmakers about the genetically engineered corn variety. Syngenta first requested APHIS deregulate the corn variety in 2005.

Feb 11, 2011

CFTC’s Gensler seeks to calm lawmaker swap fears

WASHINGTON (Reuters) – The head of the U.S. futures regulator sought on Thursday to ease the fears of lawmakers and businesses about the costs and scope of regulations for the over-the-counter swaps market, while admitting the agency was falling behind in rolling out the new rules.

Gary Gensler said the Commodity Futures Trading Commission would respond to those concerns, which arose time and again during the first of what the top Republican on the House Agriculture Committee promised would be a “long series” of hearings to critique the regulator’s work.

Feb 10, 2011

US CFTC to miss July deadline for some swaps rules

WASHINGTON, Feb 10 (Reuters) – The U.S. futures regulator
will miss some of its July deadlines to finalize dozens of
regulations for the over-the-counter swaps markets, its
chairman told lawmakers on Thursday.

The Commodity Futures Trading Commission will begin
finalizing rules this spring, but will miss some of the
deadlines set out in the Dodd-Frank bank reform law, said Gary
Gensler at a House Agriculture Committee hearing.

Feb 9, 2011

Margin rule should focus on banks-CFTC’s Gensler

WASHINGTON, Feb 9 (Reuters) – The U.S. futures regulator’s
long-awaited rule on margin requirements for swaps should focus
on swaps between banks and not businesses using the instrument
for hedging, its chairman said in testimony released on
Wednesday. Republican lawmakers at a hearing on Thursday plan to scrutinize new costs for manufacturers, farmers and other types of "end user" businesses that use derivatives to hedge their risks. The upcoming regulation on capital and margin requirements is a key concern. The Commodity Futures Trading Commission is working on the regulation as part of its detailed and complex plan to take oversight of the swaps market, worth about $600 trillion globally. The CFTC will require many swaps to be cleared and traded on exchanges or other platforms. In remarks prepared for the hearing and released by the House Agriculture Committee, CFTC Chairman Gary Gensler said margin requirements would be aimed at swap dealers, not end users, who are exempt from clearing requirements. "Proposed rules on margin requirements should focus only on transactions between financial entities rather than those transactions that involve non-financial end users," Gensler said. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Prepared testimony: r.reuters.com/wav87r FACTBOX-CFTC rule-making to-do list [ID:nN18195182] Take a Look [ID:nCFTCREG] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> END-USER ANXIETY Companies that count on using swaps are worried they will face added costs for using the contracts, either because of extra costs faced by banks -- their counterparties -- or directly from regulators. Farmer-owned cooperatives fear they will be deemed "swap dealers" by the rules, increasing their costs and hurting their ability to offer risk-management tools to farmers, said Edward Gallagher of Dairy Farmers of America. Ball Corp (BLL.N: Quote, Profile, Research, Stock Buzz), a packaging company that uses swaps to hedge the price risk in turning $3 billion of aluminum into beverage cans, estimated it would have to tie up more than $400 million in margin if CFTC regulations required such a step. "A requirement for end users like Ball Corp to post margin to its counterparties would have a serious impact on our ability to invest in and grow our business," said Scott Morrison, the company's chief financial officer, in written testimony to the committee. Morrison urged Congress to give regulators more time to develop their rules. The Dodd-Frank law requires most to be finalized by July. "Chairman Gensler has reached out to businesses for input on a realistic implementation timetable. That is a positive step and one that we appreciate greatly," he said. Last month, the CFTC officially issued its proposal to prevent big speculators from distorting commodity markets. But efforts to rein in speculative limits have drawn concern from commissioners at the agency who are divided as to whether the CFTC is moving too fast or not quickly enough. "UNREALISTIC" SCHEDULE Terrence Duffy, executive chairman with CME Group (CME.O: Quote, Profile, Research, Stock Buzz), the world's biggest futures exchange operator, said many of the CFTC proposals so far are inconsistent with the Dodd-Frank law or go beyond what it requires. The law subjected the CFTC to an "unrealistic rulemaking schedule" that has forced it to meet "unnecessarily tight deadlines", Duffy said in prepared remarks. As a result, the CFTC has not effectively studied the consequences of its proposals, and has failed to give those affected enough time to comment and comply with the new measures. "This Congress can mitigate some of the problems that have plagued the CFTC rulemaking process by extending the rulemaking schedule ... so that the CFTC will have a realistic opportunity to assess those views and measure the real costs imposed by its new regulations," he said. Duffy said many CFTC proposals so far are unclear, which threatens to chill market participation by traders concerned that legitimate practices will be arbitrarily ruled unlawful. "Indeed, the proposed rules are so unclear as to be subject to constitutional challenge," he said. (Editing by Lisa Shumaker and Dale Hudson)

Feb 8, 2011

CFTC swaps rules hurt liquidity, burdensome – groups

WASHINGTON, Feb 8 (Reuters) – Wall Street banks and major
energy companies urged the U.S. futures regulator to revise new
rules meant to increase transparency in the vast swaps market,
saying they will make hedging riskier and more costly.

Firms including Barclays Capital (BARC.L: Quote, Profile, Research, Stock Buzz) and utility giant
Dominion Resources (D.N: Quote, Profile, Research, Stock Buzz) registered their objections with the
U.S. Commodity Futures Trading Commission at the end of a
public comment period on the rule, which governs the speed at
which companies must report the details of swaps trades.

Feb 3, 2011

Food costs at records, UN warns of volatile era

MANILA/WASHINGTON, Feb 3 (Reuters) – Global food prices
tracked by a U.N. agency hit their highest level on record in
January, a problem set to worsen after a massive snowstorm in
the United States and floods in Australia.

The United Nations said on Thursday its Food and
Agriculture Organisation Food Price Index rose for the seventh
month in a row to reach 231 in January, topping the peak of
224.1 last seen in June 2008. It is the highest level the index
has reached since records began in 1990.

Jan 28, 2011

CFTC eyes how to build “bulletproof” ID system

WASHINGTON (Reuters) – Regulators seeking a barcode-like system to keep track of thousands of traders and millions of swaps contracts face an uphill battle to do it quickly and efficiently, firms that will be impacted by the new framework said on Friday.

The U.S. Commodity Futures Trading Commission is crafting an identification system for the swaps industry — one that it wants to mesh with similar ID systems under consideration by securities and systemic risk regulators in the United States and Europe.

Jan 27, 2011

US farmers get approval to plant GMO alfalfa

KANSAS CITY/WASHINGTON (Reuters) – U.S. agriculture
regulators on Thursday said that U.S. farmers could proceed
with planting genetically altered alfalfa without the
restrictions that opponents say are needed to protect
conventional and organic farm fields from contamination.

The U.S. Department of Agriculture said the decision made
by its Animal and Plant Health Inspection Service (APHIS) was
made after analysis of various economic and environmental
factors, and allows GMO farmers to get their crop in the ground
this spring.

Jan 27, 2011

Key GOP lawmakers chide CFTC for “irrational” pace

WASHINGTON (Reuters) – Key House Republicans said the U.S. futures regulator was sacrificing quality for speed as it raced to write dozens of regulations to implement its share of financial reforms.

In a pointed letter, Representatives Frank Lucas and Michael Conaway urged the Commodity Futures Trading Commission to slow down, reorganize its rule-making process, and make sure it knows how much it will cost businesses to comply with its regulations.

    • About Christopher

      "Currently based in Washington, Christopher reports on agriculture in Congress and the U.S. Agriculture Department. He also is actively involved in covering regulatory reform, with a focus on the U.S. Commodity Futures Trading Commission."
    • Follow Christopher